Indian is a slur used to describe Native americans in a derogatory way. Indians come from India, not North/South America. Offensive because original American settlers from Europe completely misnamed them.
The word Indian is a racial slur that has been used historically to degrade and dehumanize native americans. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to native americans. If you are unsure about whether or not it is appropriate to use the word Indian, it is best to err on the side of caution and avoid using it in any situation.